Companies with an average FTE below 100 receive tax relief based on all employee wages, while companies with an average FTE above 100 receive tax relief based on wages paid to employees who were not working. For example, measuring FTE from month to month, or even week to week, helps to track overall workloads and expected employee output, even as part-time schedules chop and change. FTE counts the approximate number of full-time employees employed by a specific company, but with the inclusion of part-time employees. The full time equivalent metric is calculated by companies to estimate the number of full-time employees employed within a specific time frame.

What’s important is that “on average” they work under 30 hours a week. To get a good estimate, it’s best to average hours over a 90- or 120-day timeframe.

What is 75% FTE? When is 0.75 FTE or higher considered full-time?

You can use FTE to analyze your operations and compare your business to industry standards. It is also useful to compare revenues to facility and staff sizes. I accept the treatment of my data to receive related communication about the service. With three part-time positions, this results in a value of 1.5. The full-time equivalent is an indicator that answers many of the questions Human Resources departments need answers to.

• With a headcount, each employee counts as one, regardless of how many hours they work.
• Some employers consider anything over 35 hours per week to be full-time, while others require that employees work 40 hours per week to be considered full-time.
• If it’s a 40 hour week, each employee that works 40 hours per week is equal to 1.0 FTE.
• Depending on how big a company is, the ERC is calculated differently.
• A single full-time employee is the baseline of the measurement and has an FTE of 1.0, while a part-time employee working half as many hours has an FTE of 0.5.

And while they’re all valued as part of the company, there are certain situations in which they’re not considered in the same way when calculating your headcount. In our hypothetical scenario, our company has the equivalent https://www.bookstime.com/ of 52.40 full-time employees. With the required inputs in place, we can arrive at approximately 52.40 FTEs by dividing the total hours worked by all employees by the total number of available work hours in a year.

What Is FTE & How to Calculate It

FTE stands for full-time equivalent, and it’s a unit of measurement equal to the number of hours typically worked by a single full-time employee at a given company. FTE is a way for employers to add up and compare a mix of part-time and full-time workers, by combining their relative working hours into one simple and fte calculation easy to understand value. The full time employees work 40 hours per week and 52 weeks out of the year, meaning that the number of full time hours worked on an annualized basis is 104,000 hours. Headcount refers to the total number of employees working in a company, including both part-time and full-time employees.

They also use it to calculate labor costs for the expected project workload and subsequently define the amount of funds needed to carry out the project to its end. If you have employees who work 40 hours a week, they’re full time. At 52 weeks a year, one full-time employee puts in 2,080 work hours a year.

Examples of FTE

As evident, once you have the total number of hours per day, you’ll be able to pick whatever days/employees ratio you want to carry out the estimated workload. In the end, round this down to the nearest whole number , and add the 2 full-time employees to get the final FTE . FTE will influence how many hours employees can accrue for PTO. The actual PTO an employee can accrue may depend on several factors, including years of employment that dictate an employee hourly PTO accrual rate. These rates will depend on PTO accrual rate policies of a company, organization, or institution.

• But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.
• We use it to quantify employees regardless of the difference in total working hours.
• In our example, Jimmy and Marta would be considered part-time employees.
• Calculating FTE is an important thing that you need to make sure gets done correctly.

Bear in mind that these are just simple FTE example calculations — project managers approach FTE from a different angle while federal programs use different FTE calculation methods. Whether an FTE of 0.75 is considered full-time will depend on the company policy made by the employer. If 0.75 FTE is considered full-time in a company, such employees may qualify to apply for the Public Service Loan Forgiveness program. In practice, these numbers still usually fall somewhere between 32 and 40 hours per week, with 40 hours per week being a common norm for a full-time schedule. 💡To track employee work hours and decide whether your employees are full-time equivalents, try Clockify, our free time tracker for teams. Using FTEs makes it easier to measure your business performance, particularly if you have lots of part-timers. After translating the part-timers into FTEs, you can compare your staffing levels to your industry competitors.

Different Rules for Different Workers

Hours of service do not include the hours of seasonal employees who work for 120 or fewer days during the taxable year, nor do they include hours worked for a year in excess of 2,080 by a single employee. Calculating FTEs can be useful for budgeting current and future workforce needs. It also allows employers to examine total hours worked across the business rather than looking only at how many full-time and part-time employees are on staff. The ACA makes health coverage a shared responsibility of individuals, employers, and the government to ensure that as many people as possible have affordable health insurance.

FTE is also used to calculate the number of accrual hours for PTO, per employee. Outside of the business environment, this unit of measure is also used to measure a student’s class load or involvement in a school project. The 7 full-time staff at the date of application equate to 7 FTEs. Mario reads through Facebook’s annual report and discovers that the firm has 35,587 employees and a revenue of $ 55,838 million.

• December 20, 2019
• Bookkeeping
• taevas